By Christopher E. Brown, J.D., and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

This blog is the fourth in a series intended to provide an introductory review of the basics of contracting for physicians and health professionals, primarily by discussing employment agreements. We will highlight many of the common provisions found in employment contracts, along with many of the mistakes and pitfalls that we see in our day-to-day practice.

By the end of the series it is our hope that physicians and other health professionals will understand the common language and terms found in employment contracts for professionals so they can recognize mistakes commonly made by physicians and health professionals when negotiating them. We hope to help make both employers and employees more knowledgeable about employment contracts so they can avoid potential problem areas and legal entanglements.

Our comments here are meant to provide general rules we have learned from our experience. However, please remember, every situation is different and there are exceptions to every rule.

Tip 9 - Restrictive Covenants (Sometimes Referred To As Covenants Not To Compete) Are Enforceable By Law in Florida.

A covenant not to compete is common in most physician contracts. This clause prevents a departing physician from competing with the employer in a specific geographic area for a specific period of time. These restrictive covenants are, as a general rule, enforceable under Florida law.

There are exceptions and defenses that can be used to defeat or prevent the enforcement of a restrictive covenant, especially in the case of a physician. However, unless you have money set aside to pay for litigation, expect to honor it if it is in the agreement. As an employee, your negotiation strategy should be to have it removed completely or reduce the period of time and reduce the geographic area as much as possible. Also, it should be worded so as to only apply to the office or location in which you actually work and not to the medical subspecialty or type of practice in which you will work.

If you decide you are going to leave a group or practice and you may need to work in violation of a restrictive covenant, it is very important to plan ahead for this. Often strategies can be developed that will avoid litigation.

If you are not able to negotiate this away completely: a) reduce the percentage you agree to pay to fifty percent (50%) or have it reduced to twenty five percent (25%) for each year you are in the practice, and b) insert a provision that if you maintain the same insurance company or obtain retroactive coverage, this will be substituted for tail coverage. If you maintain your insurance with the same company, in reality your “tail” is covered and you should need no additional tail coverage policy.

As a physician, do you have any questions about contracts? Tell us your mistakes or triumphs in negotiating your contract below.

About the Authors: Christopher E. Brown, J.D., is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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